My momma says Life is like a box of chocolates. Bryan Ashenden April 2013

Transcription

1 My momma says Life is like a box of chocolates Bryan Ashenden April

2 You never know what you are going to get 2

3 Current areas of regulatory change Issues for the future Budget 14 predictions 3

4 Current areas of regulatory focus 4

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6 APES 230 Who does it apply to? Members Members in Public Practice (a member in a firm that provides professional services) Members in Business Covers the provision of financial planning advice All Members must act in the best interests of the client Members in Public Practice must: State in a written form that the advice is provided in line with APES 230 Charge only on a fee for service basis (unless prior client consent) Not accept third party payments (unless prior client consent) Record all soft dollar benefits received 6

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8 Limited Licensing Regime Replaces existing accountant s exemption From 1 July 2016, must be licensed in order to recommend SMSF establishment Would also allow: Advice on super rollover to the SMSF Contributions to the SMSF Certain class of financial product advice also permitted 8

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10 The world of SMSF advice is changing New limited licensing regime APES 230 Removal of Accountant's exemption Future of Financial Advice Auditor registration requirements 10 10

11 Key issues for consideration 11 New limited licensing regime What can and can t you do? Best interests obligations A requirement under FoFA and APES 230 How does it impact your SMSF recommendations? New SMSFs v existing SMSFs Conflicted remuneration FoFA v APES 230 Fee disclosure requirements FoFA v APES

12 Timetable for change New limited licensing regime is available APES 230 commences APES 230 remuneration requirements July 2013 July 2014 July 2015 July 2016 Full FoFA obligations commence APES 230 best interests requirements Accountant s exemption removed Tax Agents Services Act changes for financial planners Enhanced education requirements Stronger super implementation 12 12

13 TASA overview Jul 30 Jun 1 Jul 31 Dec 1 Jan 30 Jun 1 Jul 31 Dec 1 Jan 30 Jun 1 Jul 31 Jul 31 Oct 31 Jan Consultation TASA Commencement TASA operational Notification period Transitional period Notify Registration effective Notify Registration effective Notify Registration effective Register effective for 3 years from date of registration NOTIFICATON PERIOD If registration occurs during notification period, there is no requirement to initially demonstrate: Supervision Experience Education / qualification Advice can still be provided during notification period without having registered, provided appropriate disclaimer/disclosure is issued with the advice Registration can occur at a Licensee level or at an AR level TRANSTIONAL PERIOD If registration occurs during transitional period, there is no requirement to initially demonstrate: Supervision Education / qualification However, the Board needs to be satisfied that the tax service can be provided at a competent level (in the absence of meeting formal qualification criteria). Advice provided from the commencement of transitional period by someone not registered is in breach and penalties may apply. Disclosure is not sufficient. Registration can occur at a Licensee level or at representative level

14 Issues for the future 14

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16 Who remembers 1997? Recommendations included: Formation of ASIC and APRA Creation of a National Consumer Credit Code Greater product disclosure allowing for meaningful and informed comparison of products, including adviser fees Accounting standards to be harmonised with International standards Single licensing regime for financial sales, advice and dealing Single set of requirements for financial sales and advice Regulation of real estate agents should be reviewed Accountants not required to be licensed for incidental advice A central complaints referral service should be established APRA should regulate superannuation in accordance with retirement objectives Excluded funds should be monitored by ATO Superfund members should have greater choice of fund 16

17 First round submissions closed Some submissions have called for: ATO to remain regulator over SMSFs Specialist accreditation for SMSF advice LRBAs require licensing Deductibility of advice fees Review of retail / wholesale and general / personal advice definitions Formal review of SMSF property gearing Extend MySuper to MyPension Address longevity issues, including access to Age Pension Reinforce the objective of super to deliver up to 65-70% of income replacement for all Australians Strengthen oversight, governance of the superannuation industry 17

18 Best quote so far... SMSFs allow individuals greater choice and control in managing their own retirement income arrangements, and the growth in SMSFs provides competition to the APRA regulated funds that will further drive technical and dynamic efficiency gains in the sector. SMSFs involve no financial promise and are not prudentially regulated. As such, they are appropriately subject to a light touch compliance regime administered by the ATO. This approach should be maintained. 18

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20 Budget 14 predictions 20

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